Russia Encouraged to Develop Transparent Procurement Practices

September 9, 2011

by Tracy Perrelli, an international trade specialist in The International Trade Administration’s Market Access and Compliance unit.

In 2009, President Barack Obama and Russian President Dmitriy Medvedev met in Moscow to help improve commercial relations between the United States and Russia. To continue this dialogue, a delegation of 13 officials from the Russian Ministry of Economic Development came to Washington, D.C., on May 18–20, 2011, to look at ways to improve government procurement regulations. Oleg Savelyev, deputy minister of economic development, led the Russian delegation.

Michelle O’Neill, deputy under secretary for international trade, encouraged the Russians to adopt government procurement principles that are more in line with the Agreement on Government Procurement of the World Trade Organization (WTO). “If done right, procurement can spur efficiency … and provide opportunities for innovative companies to grow. If done badly, it can waste resources and harm the economy.”

O’Neill attended as coordinator of the U.S.–Russia Business Development and Economic Relations Working Group, a joint U.S.–Russia body that was established because of the 2009 presidential summit. She pointed out the likely benefits to U.S. firms under a procurement system that adheres to international norms. “If Russia implements a procurement system that is more transparent, more receptive to merit, less prone to favoritism—and similar to the system with which U.S. firms are accustomed to dealing when selling to our government—this will spur more business opportunities for U.S companies.”

The meetings came at a critical time because Russia is currently considering ways to improve its government procurement system. Medvedev tasked the Ministry of Economic Development with drafting new procurement legislation by fall 2011.

The Europe division of the International Trade Administration’s Market Access and Compliance unit, with support from six other federal agencies, organized the program for the Russian delegation. Program topics included the principles of transparency and fair competition in the U.S. procurement system, methods of procurement, contract price determination, reverse auctions, use of e-government to enhance efficiency, and an overview of the WTO’s Agreement on Government Procurement.